Well, personally I think this is Microsoft's (somewhat) late response to the Sun Microsystems & Google partnership.

Sun Microsystems has already developed a free office style product called OpenOffice (OpenOffice Website for those who want to take a look). It has been around for a while and has just released version 2.0. Now with them partnering up with Google to improve the product who knows what will happen.

It's good to see Microsoft getting a little more competition and following the trends that are coming up. Despite Mr. Gate's speech to the contrary, I still think Microsoft is going to be a company that is about the money over the service they provide. They have been so big for so long they've gotten the attitude "it's my way or the highway".

We'll see how it goes...